Business enjoys record conditions in March

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Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)

 

Businesses extended their rebound from last year’s recession, enjoying their best performance on record during March, and with strong forward orders pointing to growing activity in coming months.

While the monthly National Australia Bank business survey released on Tuesday also showed a dip in confidence, it remains well above average.

“This in combination with a very strong read for forward orders points to ongoing strength in activity, which hopefully sees conditions remain elevated, even as we pass through the end of the JobKeeper program,” NAB chief economist Alan Oster said.

The NAB business conditions index rose eight points to a record 25 index points, while confidence eased three points to an index of 15.

“This is a very solid survey result. Overall, the recovery over the last year has been much more rapid than anyone could have forecast,” Mr Oster said.

The end of the JobKeeper wage subsidy last month has raised concerns over what impact it will have on employment.

Treasury has forecast as many as 150,000 people could lose their job without the subsidy.

New figures from the Australian Bureau of Statistics show payroll jobs rose by 0.8 per cent over the month to March 27, and were up 0.1 per cent the last fortnight, ahead of JobKeeper ending.

The ABS said the pace of payroll jobs across March was similar to what was seen a year earlier before major COVID-19 restrictions came into effect.

Meanwhile, the opportunity to travel to New Zealand has lifted the mood of Australians, being a step towards some sort of normality after the tough restrictions on everyday life imposed during the pandemic.

The weekly ANZ-Roy Morgan consumer confidence index jumped 5.9 per cent, reaching its highest level since September 2019 and sprinting past its long-run average.

“The receding of the Brisbane lockdown and announcement of the trans-Tasman travel bubble has seen confidence jump sharply,” ANZ head of Australian economics David Plank said.

“The jump has occurred despite the delay in the COVID-19 vaccine rollout.”

Quarantine-free two-way travel with NZ was confirmed last week by the prime ministers of both countries.

The confidence survey, conducted at the weekend, would have captured last week’s decision by the nation’s health authorities to recommend the AstraZeneca vaccine not be given to people aged under 50.

This followed cases abroad of blood-clotting among younger people after having the vaccine. Two such cases have been recorded in Australia.

Prime Minister Scott Morrison announced the government will no longer set targets for the remainder of the vaccine rollout, a timetable that was already in tatters.

Australian Chamber of Commerce and Industry acting CEO Jenny Lambert still wants to see a rollout plan to give more certainty and transparency.

“Obviously the government was relying more heavily on the AstraZeneca vaccine, there is obviously a lot of changes they have had to deal with,” she said.

“But the important thing is to engage with key stakeholders, such as business, and to be transparent with the community and start talking about how we can see a path to reopening some of these restrictions.”

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